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The Nose

Read Our Lips: More New Taxes!

Posted 4/13/2005

Some people think property-tax assessments in Baltimore’s gentrifying Mount Vernon neighborhood are too low. they want the taxes increased.

These folks—some 33 members of the Mount Vernon-Belvedere Association—aren’t talking about their own valuations, though. They’re talking about some of their neighbors’ places. The ones with the cheap apartments.

And these folks wanting the tax increase don’t want their neighbors to pay those taxes. Not necessarily.

They want them to sell out.

To the pals of the tax increasers.

The best part? They openly admit all this.

“What’s behind this whole tax thing for us—there’s a real demand for big houses here,” says Mount Vernon resident Paul Warren, who is leading the charge. “D.C. is driving it.”

Warren, who telecommutes to Fairfax County, Va., from the jaw-droppingly renovated mansion he and his wife bought on the 800 block of Park Avenue in 1999, says a lot of Washington-area denizens of his acquaintance would sorely love to pick up a big ol’ historic 25-foot-wide townhouse with parquet floors and plaster filigrees. He says they’d pay several hundred grand for the privilege of spending several hundred grand more fixing them up.

But nobody much is selling (though two big ones on his very block are currently up for sale—one priced in the mid $600s and the other in the $700s—each full of renters paying $600 to $700 per month).

The reason they’re not selling, Warren says, is that their absentee owners bought them cheap decades ago. Their taxes—figured on the basis of the income they derive as businesses—have remained low. And so the rents stay cheap, the landlords make money, and everyone is happy. Except the rich people who want to kick the renters out and turn them back into mansions.

“They’re just rotting there right now,” Warren tells the Nose while standing on the stunning terrace overlooking his backyard. “It takes a lot of money to maintain these old buildings correctly.”

He has a point. In a recent tour through one of these fine old places for sale, the Nose spotted a few deferred maintenance issues.

Warren says his group (which is decidedly independent of the Mount Vernon-Belvedere Association) hired a consultant to advise on how to raise the neighborhood’s standards. The two options were to either to use code enforcement (which in Baltimore is a funny, funny joke, unless you’ve erected an unapproved deck on your Fells Point roof) or to get taxes raised.

The group crunched numbers to find the neighborhood’s most egregiously undervalued apartment buildings. They found 100 townhouse-based buildings valued at under $100,000—a third (or less) of their likely market value. So they named this their “100 under 100 initiative.”

What about the modest-income renters, the Nose asked: What about big places, like Eddie’s grocery, that might benefit from the lower valuation and therefore offer customers lower prices?

“We’re very sensitive to the true commercial properties,” Warren explains. “The last thing we want to do is hurt any of our retail.”

Hence the very specific appeals.

The group made its 100 cases to the tax assessor last June and waited for the new assessment numbers.The 100 properties saw their assessments soar by 27 percent, even though the average residence assessment in the city jumped 77 percent.

Back to the drawing board.

“In January,” Warren says, “we learned that you can appeal somebody else’s assessment.”

Normal tax appeals go like this: You think yours is too high, you argue your case. Owen Charles, who assesses Baltimore City’s property taxes from an office in the William Donald Schaefer Tower downtown, says he sees about 3,500-4,000 such appeals per year.

How many times has someone come in and said, “My neighbor’s value is too low?”

Once. In the ’90s. “But they didn’t go through with it,” Charles says.

Warren and his people are going through with it. So now it’ll get interesting.

“What happens is the department notifies the property owners of the appeals—that a third party has challenged the assessment,” Charles says, adding that he is “just now preparing to send out the notices by the end of this week.”

That means that, by the time you read this, 100 or so landlords will be getting the news officially.

They need not attend the first hearing, Charles says. But if Warren’s logic compels Charles to raise some values, there will be more hearings. And some mightily miffed absentee landlords.

All this could come in the next two months or so, Charles says.

Warren says his position is just good public policy and not so unusual. “Montgomery County challenges assessments routinely,” he says. “Any time a property sells for $150,000 more than its assessment it puts in an appeal.”

Actually, it used to.

Montgomery County Executive Doug Duncan decided to run for governor and, a few weeks ago, right after The Washington Post called to ask him about 178 appeals his Office of Public Advocate had filed, Duncan suspended the policy.

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